Republicans Summon IRS Chief for More Queries on Agency

By Richard Rubin -
Jul 11, 2013

House Republicans, as part of their
multi-pronged focus on the Internal Revenue Service, are calling
the agency’s interim leader to testify next week to explain how
the IRS selects small businesses for audits.

Danny Werfel will appear before the House Small Business
Committee on July 17, a day before other IRS employees appear
before the Oversight and Government Reform panel to talk about
the selective scrutiny they applied to small-government groups.

“Our intention is to make sure small businesses aren’t
being unfairly audited or scrutinized for inappropriate
purposes, as has occurred with some conservative leaning
nonprofit groups,” Representative Sam Graves, a Missouri
Republican and chairman of the Small Business Committee, said in
a statement.

In addition to the two hearings, House Republicans are
proposing a 24 percent budget cut to the IRS, imposing new
restrictions on agency bonuses, videos and conferences, and
preparing legislation to remove it from enforcement duties for
the 2010 health-care law.

Republicans have seized on the controversies surrounding
the agency and the unpopularity of tax enforcement to make the
anti-IRS push a centerpiece of their agenda.

At the July 18 oversight hearing, IRS employees from
Washington and Cincinnati will be asked about the delays
experienced by groups applying for nonprofit status,
Representative Darrell Issa said.

Delayed Process

Issa, the chairman of the House Oversight and Government
Reform Committee, said in announcing his hearing that
interference from IRS officials in Washington delayed anti-tax
Tea Party groups’ applications for nonprofit status.

“This hearing will examine why decisions to elevate cases
to more senior levels of the IRS led to unjust delays and unfair
treatment of Tea Party applications,” Issa, a California
Republican, said in a statement. “Had Washington IRS officials
simply kept their hands off these cases and allowed employees in
the Cincinnati office to process applications independently,
instead of facing excessive delays, these cases would have been
processed just like other advocacy cases.”

The IRS said May 10 that it had given extra scrutiny to Tea
Party groups, some of which experienced delays in their dealings
with the agency exceeding three years. The disclosure has
prompted six congressional inquiries, a Justice Department
criminal probe and the resignation of the acting IRS
commissioner.

Single Application

Interviews conducted by the oversight committee have shown
that a Cincinnati-based employee started the scrutiny of Tea
Party cases in 2010 by flagging a single application. Cincinnati
employees quickly brought the issue to Washington-based lawyers
for guidance, starting the process that led to delays and what
the IRS later said were inappropriate questions.

The investigation so far hasn’t revealed any involvement
from IRS officials outside of the exempt organizations division
or from outside the agency. It also hasn’t revealed evidence of
politically motivated targeting.

The oversight committee has yet to announce the witness
list for its hearing.